New college cost comparison tool

Calculating and comparing college costs, Photo by Derrick Coetzee

Calculating and comparing college costs, Photo by Derrick Coetzee

College choice would be much less stressful if costs weren’t part of the decision. But they are and calculating and comparing them can be difficult. That’s where a new tool from College Abacus can help parents and students.

Calculations Wouldn’t it be helpful if parents and students could calculate and compare costs of attending different schools before paying application fees to schools they can’t afford?

A recent federal law mandates schools to include a Net Price Calculator (NPC) on their website to give families a general estimate of the net price of attending that school. The goal is to figure out how college sticker price may be reduced by financial aid the student is qualified to receive.

The actual amount is contained in a financial aid award letter that shows grants, scholarships and student loans the student is eligible for if he attends that school. However, students won’t get their award letter until they have applied and were admitted to that school.

Note that qualifying students won’t be eligible to receive monies from federal and state government financial aid programs and many college endowment funds without first submitting financial aid applications. And merit awards are often based on student abilities as compared to others offered admission.

Also note there is no one NPC that all colleges use. Schools can use the federal Department of Education (ED) NPC template, use another or create their own so the amount and type of info parents and students enter for each college to get a calculation may vary.

Answers Learning potential costs from each college’s site can help families form a college list that is more affordable. Discovering costs on one website can save time and stress. College Abacus does this. Families enter information once to get their answers. They also get details about which NPC the school uses and a description of the type of aid-grant or scholarship, and source-college or government.

Best of all, it provides different ways for families to get this information, depending on their needs and budget. The first way is free and allows comparison for up to three schools. There is a charge for the other way which gives financial aid estimates for the top 100 colleges and/or top 100 universities ranked by US News & World Report.

Tips To get the best cost estimates, consider the following tips:

  • Answer questions as accurately as possible because they are based on financial aid questions federal and state governments and colleges will ask on financial aid forms.
  • The federal College Navigator also provides school NPCs but like going to each college or university’s site, parents and students must input their info per school. College Abacus saves the data so info is entered once. Also it is available for use and not affected by government shutdowns like federal sites
  • Education consumers have to be savvy when it comes to college costs. NPC’s do not take into account hidden costs. It is up to families to add in POCS COA costs.
  • For more info about financial aid costs, read the new blog from College Abacus. POCSmom’s readers  receive a 20% discount for Abacus100 by using the code POCS20.

Give College Abacus college cost comparison tool a try and let me know how it helped you make better college choices.

 

 

Net Student Price

Cliché: Count the cost.    
POCS Reality: College costs continue to rise.

 

 How much will you pay out-of-pocket for college? No matter where you attend, you will likely pay more than current students based on your net price because college costs continue to skyrocket; but those higher costs are not mainly from tuition.

 According to the Center for College Affordability and Productivity’s Net Tuition and Net Price Trends in the United States 2000-2009 Report, net student tuition increased by $1,067 but net student price rose by $2,988 at 4-year schools. The Report’s conclusion is:

“While tuition tends to get most of the attention when it comes to public discussions of college costs, the $2,988 increase at the four-year level indicates that roughly two-thirds of the increase in total college costs originates from non-tuition sources. This suggests that perhaps more attention needs to be paid to cost control for these other expenses.”

 Two year schools’ net student tuition fell by $849 while net student price rose by $1,333.

 The Report defines the terms:

  • Published Tuition: the “sticker price” of college.
  • Net Student Tuition: how much students actually pay for tuition (that is, sticker price less grant and scholarship aid).
  • Net Student Price: how much students actually pay, including non-tuition expenses, after accounting for grant and scholarship aid.
  • College Net Tuition Revenue: how much tuition revenue colleges receive per student.

  Besides tuition, other college costs include college fees, books and supplies, room and board, transportation and personal expenses. There are also hidden costs such as borrowing costs if taking out loans, car purchase costs if buying a car. 

 Check out the Report’s Appendix A Alternative Methods of Calculating Net Tuition for an interesting description of some other organizations’ methodology including the College Board’s Trends in College Pricing.

 POCSmom’s College Prep DIY Insight: When you get your financial aid award letter, look for need-based grants and merit scholarships that reduce your college bill. Included student loans must be repaid and have borrowing costs from fees and interest charges that will increase your out-of-pocket college costs. Federal Work-Study (FWS) is a job where the student earns a paycheck.

 The FAFSA4caster is a tool to help families estimate their college costs although flaws may make the result inaccurate.

 Another tool, Net Price Calculators, found on each college website, also can distort college costs if they include financial aid loans and FWS awards; and merit awards are difficult to estimate. They also do not include hidden college costs.

 Let’s get the conversation started about cost control for non-tuition college expenses. Meanwhile, the Net Tuition and Net Price Trends in the United States 2000-2009 Report stays focused on out-of-pocket costs as the net student price.

*POCSmom’s DIY College Prep Insight: Net Price Calculator-From Day Dream to Nightmare

Cliché: Count down.    
POCS Reality: Before attending college, it is important to accurately calculate your out-of-pocket costs.

 

How did the dream of comparing college costs turn into a nightmare of confusion?

The Day Dream

Prospective students and their parents could learn their college costs before attending, so they wouldn’t get in over their heads in debt..

The Reality

A new federal law (Higher Education Opportunity Act of 2009 (see HEOA Sec. 111 which amended HEA Title I, Part C: added HEA Sec. 132(a), Sec. 132(h) (20 U.S.C. 1015a(a), 20 U.S.C. 1015a(h))) requires colleges to include a Net Price Calculator (NPC) on their website by October 29, 2011.

The basic Net Price Calculation is:

Price of attendance – estimated financial aid = out-of-pocket college costs.

The Nightmare

Although October 29th has not yet arrived, many schools have already added an NPC. The problem is both the calculator and the calculations are so flawed that college cost comparisons are difficult at best.

  1. No uniform calculator exists and colleges using some general guidelines are free to design their own NPC or contract with a business to develop one for them. That means students and parents will be college cost comparing apples to oranges.
  2. Price of Attendance is underestimated and always will be until a college’s cost of attendance formula (COA) includes a family’s huge hidden extra expenses. I call this formula the POCS COA.
  3. Financial aid estimates are inaccurate for two reasons. First, because the real calculation will be based on a complicated formula applied to the 100+ questions students and parents must answer on the federal financial aid form FAFSA. Some schools may also require additional forms regarding awards from institutional funds. Second, because not all financial aid reduces the college bill but are ways to pay the college bill. Only free money grants and scholarships lower college expenses. Federal education loans have borrowing costs that raise the college costs they are being used to help pay, but this fact is not mentioned. Don’t get me started on the Federal Work Study (FWS) Program. Here, students, not the college, receive a paycheck as they work in their FWS job. I think of this award (often $1000-$2,000 for the year) more like pizza and latte money.

 The POCSmom’s DIY College Prep Insight and Stress-busting tip

I love the idea of families calculating their college costs and having a plan for how to pay them. College is supposed to help not hinder a family’s finances, so think about colleges you can afford either from cash on hand (savings, checking, stocks, bonds, mutual funds, education savings plans) and/or what you can afford to borrow (based on repayment and projected future income).

Use my POCS COA formula to calculate college costs and a chart to determine how to pay those college costs.

For more college-bound information and myth-busting tips, consider POCSmom’s advice for the college-bound:

http://wendydavidgaines.collegeexpertpanel.com/pocsmom%e2%80%99s-diy-insight-advice-for-the-college-bound/

Don’t let sky rocketing college costs and shrinking financial aid plunge your family into a deep hole of educational loan debt. Escape the Net Price Calculator nightmare and start living your college dreams. 

*POCS: Parent Of a College Student